India's Proposed 12% Duty on Imported Steel
In response to anticipated increases in steel imports into India, prompted by global trade shifts such as U.S. tariffs and European protectionism, the Commerce and Industry Ministry's anti-dumping body has recommended a 12% duty on certain imported steel products. This proposal aims to protect domestic steel producers from cheaper imports but has raised concerns among MSME manufacturers regarding potential price hikes and industry monopolization.
Global Trade Context
- President Trump's 25% tariffs on steel imports and European Union's protective measures have led to fears of trade diversions affecting India.
- Countries like the EU, Canada, and the UK have implemented 129 trade remedy measures against steel products, increasing India's risk of import surges.
Domestic Industry Dynamics
- Global Trade Research Initiative cautions that safeguard measures could foster monopolistic practices, limiting consumer options and escalating prices.
- Contrary to protectionist claims, India's domestic steel production increased by 19% between FY 2021-2024, with utilization rates reaching 83-90% and a projected 10% demand rise in 2025.
Impact on Related Industries
- The proposed duty could inflate steel prices, negatively impacting sectors like automotive, infrastructure, and renewable energy.
- Technological and quality limitations in India necessitate some importation of specialized steel.
Stakeholder Responses
- Companies like ArcelorMittal Nippon Steel India, while petitioning for safeguard duties, are major importers themselves, weakening their legal stance.
- Engineering Export Promotion Council of India (EEPC India) suggests measures to safeguard MSMEs, such as allowing procurement at export parity prices and implementing country-specific quotas.
EEPC India Chairman emphasizes the importance of maintaining price stability by using the Tariff Rate Quota (TRQ) price as a benchmark to curb potential price surges, ensuring affordable raw material supply for engineering and manufacturing sectors.